Shaping the business of the future

If there’s one thing we’ve been reminded of at CeBIT Australia 2018, it is the rapid pace of change. In fact, a key reason for attending the event is to try and keep up with the constantly evolving business and technology landscape.

So who better to discuss how Australian businesses can prepare themselves for the future, than the leaders of some of Australia’s most progressive companies?

1. Make space for innovation

People struggle with exponential trends. It is not so much access to information and tools that stems the flow of innovation, but our ability to focus on what is important.

To be able to innovate at the pace required today, Jason Pellegrino and Ed Harrison both say you need to first decide what you won’t do any longer.

“You need to decide how quickly you can move resources out of high-margin legacy products that are really established, to invest in new areas,” explains Harrison.

Harrison argues that to do this, businesses should create a standalone function that empowers internal disruptors with their own goals, resources and methodologies, so business-as-usual does not inadvertently crush their vision. Part of this strategy is not just deciding what model of funding is invested in innovation, but also understanding when and under what circumstances this unit should be integrated back into the main business.

Pellegrino agrees, saying that the barriers to learning are dropping, and the technology to power innovation is widely available. He provides a compelling example of a cucumber farmer in Japan who uses TensorFlow machine learning to sort his cucumbers. For many people, though, having the mindset required to understand the possibilities provided by the technology is missing.

So how can we fix that?

Pellegrino believes that instead of immediately heading back to the workplace to implement exciting new ideas revealed at CeBIT Australia 2018, we should first figure out what to stop doing in order to make space for the new. He sees this prioritisation as the single most powerful lever in preparing a business for the future.

For his part, Ed Harrison advocates making use of “hack days”. He says these are remarkably successful and valuable at Yahoo 7, both in terms of bringing about incremental innovation, but also in terms of the positive impact these kinds of events have on the innovation mindset and broader company culture.

2. Invest in the community: future skillsets and community readiness

Business leaders who are clear about what their company stands for and what it offers the community and customers beyond the product are the ones who will ultimately succeed.

However, as automation becomes the next driver of change – and industry 4.0 is really about artificial intelligence – there are concerns that Australian businesses are being slow to prepare. Currently, only a small percentage of businesses invest in AI, which raises question about how the gap with the rest of the world should be closed so we don’t leave $2.2 trillion of growth on the table. Failing to close that gap will have a significant, negative impact on our society.

More positively, $1 trillion dollars of growth opportunity is open to Australian business if the digital skills transition is managed well. Just as disruption will continue to accelerate, so too must the rate of skills development in the workforce to ensure we have full employment and can power Australia’s digital economy. This means focusing on STEM programs in schools to properly train the next generation.

But perhaps even more important is the need to empower the community. Businesses should support local communities to thrive in the digital age, via sport and creative arts. Ideas come from everywhere, so creating an ecosystem of trust and diversity of voice is essential to sustaining identity while embracing change. It is also a way to support continuous learning, thereby driving and challenging all communities.

3. Focus on the future customer experience and your core business purpose

All the CEO panelists are advocates for clarifying and utilising their core business purpose as a way to streamline the opportunities open to them. However, that can’t be managed by internal or competitive focus alone; it needs to be viewed through the filter of understanding trends in customer experience for innovation in the right, customer-focused direction to become a reality.

“You shouldn’t be looking at your own competitors, you should be looking at what experiences your buyers are getting from everywhere, and figure out how you can match or better it.” Nicholas Gray, for example, says The Australian should not be looking at its newspaper competitors, but to Netflix as a customer experience benchmark.

Interestingly, artificial intelligence and machine learning are seen as representing the biggest opportunity in terms of meeting future customer experience trends: “70% of Netflix content is driven by their recommendation engine – driven by machine learning and personalisation.”

4. Build trust through transparency of data

Data is a valuable asset that users are willing to share with businesses, in exchange for a unit of value. But who we trust and why we trust them has been called into question due to recent instances of election tampering, bank misconduct and delayed disclosure of data breaches.

Because data provides an impeccable audit trail, there are likely to be more public falls from grace. Which is as it should be if trust is to be rebuilt.

The way businesses organise and protect information is now crucial for minimising errors and leaks. But personalisation and other relevant, enriched digital services are driven by data, so businesses must ensure they have a responsible, valuable mechanism in place to store, manage and use it.

Pellegrino believes businesses should follow a number of key principles around data management:

Understand the trust – as people give you data, they place their trust in you to manage it responsibly

Transparency – giving people insight into how data is used, and also when and how it is breached

Data collection – don’t collect data that doesn’t enable you to create value to users. This is as risky as carrying unnecessary cash

Use data to improve the value of products and services to users – and make sure they see the exchange (for example with location services)

How to prepare your business for the future

Make brave decisions about what you will no longer do (or reduce) in order to create more customer value in the future.

Understand what customers will expect from you in the future, and prepare the community to support – and be supported by – the new digital economy.

Be clever about data – how you collect it, protect it and talk about it, as well as what you do with it to create a magical customer experience.

These will be the key drivers of success. So, what will you not do next?